January 21, 2015

Promote Lower Cost Pharmacy Options, Increase Competition, Reduce Health Care Fraud, Waste, and Abuse

(Washington D.C.)—The Pharmaceutical Care Management Association (PCMA) today released its 2015 policy agenda, which includes reducing prescription drug costs for consumers, employers, unions, Medicare Part D, and other government plans.

“Fortunately, there are a number of bipartisan policy options that will reduce the costs and improve the quality of prescription drug benefits,” said PCMA President and CEO Mark Merritt.

PCMA’s 2015 Policy Agenda

Ensure Seniors Have Access to Lower Premium Part D Plans. In 2015, nine out of 10 Medicare Part D plans will provide seniors the option of using a “preferred pharmacy” to lower their out-of-pocket costs. Seniors enrolled in these plans are able to get their prescriptions filled at virtually any pharmacy but have the additional option of using a lower-cost “preferred pharmacy.”

While the drugstore lobby is pressuring Congress and regulators to eliminate these plans, this would violate CMS’ pledge to avoid controversial changes to Part D. Eliminating these plans would also increase premiums by approximately $63 annually for over 75 percent of Part D enrollees and raise overall program costs by an estimated $24 billion over the next 10 years, according to an actuarial study from Oliver Wyman. CMS’ own study found lower negotiated prices at preferred pharmacies.

In addition to being overwhelmingly popular with seniors, a survey conducted by Hart Research Associates found that nine out of 10 seniors from urban, suburban, small town and rural areas have convenient access to these discounted pharmacies in Part D. Currently, most national Part D pharmacy networks include nearly all drugstores — almost 67,000 nationwide — giving beneficiaries access to more pharmacy locations than the combined number of McDonalds, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts across the country.

Create “Safe Pharmacies” in Part D for Controlled Prescription Drugs. The creation of “Safe Pharmacies,” or a “Lock-In” program in Part D for controlled substances would allow Part D plans to require at-risk beneficiaries to work with their plans to choose a single pharmacy to dispense controlled substances.

A report by the Health and Human Services Office of Inspector General calls for a pharmacy “Lock-In” program in Part D. The Centers for Disease Control and Prevention, CMS, the Government Accountability Office and the White House Office of National Drug Control Policy also have called for these programs in Medicare. Currently, 46 state Medicaid agencies operate “Lock-In” programs and 49 states have enacted prescription drug monitoring programs (PDMPs).

Legislation introduced in the last Congress by Representative Kevin Brady (R-Texas), chairman of the Ways and Means Subcommittee on Health, and separate legislation introduced by Representatives Gus Bilirakis (R-FL) and Ben Ray Luján (D-NM), each included policy solutions that could help reduce prescription drug fraud and abuse.

In addition to having “Safe Pharmacies” in Medicare, policymakers can combat prescription drug abuse and fraud in Medicare and the commercial sector by enhancing the current system to make it more difficult for drug-seekers to obtain fraudulent prescriptions at the pharmacy counter. Options include:

  • Requiring drugstores and pharmacists to register with state PDMPs;
  • Allowing payers to coordinate with state drug monitoring databases; and
  • Giving Part D plans the same fraud prevention tools, including predictive analytics and suspension of payment as Medicare Parts A & B.

Allow More Home Delivery of Prescription Drug Refills. Mail-service pharmacy in Medicare reduces drug costs for beneficiaries while offering greater convenience. Removing Medicare’s restrictions on home delivery and encouraging beneficiaries to get maintenance medication refills by mail would improve drug adherence and reduce hospital and physician costs. A CMS analysis which compared mail-service pharmacies and retail pharmacies in Medicare found that mail-service pharmacies have lower overall costs.

Specialty pharmacies are also widely utilized by pharmacy benefit managers, health insurance companies, and plan sponsors to help manage prescription drug costs and improve quality of care. Specialty pharmacies must meet many requirements to effectively handle injectable biologic medications that often require special handling, clinical protocols, and can cost many thousands of dollars per dose.

A national survey of physicians who prescribe specialty medications found that just 5% believe that all drugstores “have the expertise and capability to provide the different types of specialty medications to patients.” In addition, a recent report on specialty pharmacies notes that “specialty drugs require a level of experience and expertise that most drugstores simply do not possess.”

Nationwide, mail-service and specialty pharmacies will save consumers, employers, unions, and government plans a combined $311 billion over the next decade, according to a recent study. Unfortunately, proposed Affordable Care Act (ACA) regulations could limit payer’s ability to take full advantage of the savings offered by mail-service and specialty pharmacies.

Increase Competition in the Prescription Drug Marketplace. A recent Food and Drug Administration (FDA) advisory committee’s recommendation for approval of the first biosimilar drug in the United States was a positive first step toward increasing competition and in turn lowering prescription drug costs for consumers, employers, government programs, and others.

The FDA can enhance greater competition in the pharmaceutical marketplace by:

  • Expediting Approval of Competing Brand Drugs. Currently, the FDA focuses on expediting approvals for only certain types of new drugs, bypassing other products that would offer benefits comparable to existing medicines and thus bolster competition among branded drugs.
  • Eliminating Delays in Generic Drug Approvals. The median Abbreviated New Drug Application (ANDA) approval time is currently 36 months, meaning that it takes the FDA, on average, more than three times longer to approve an ANDA than to approve a standard New Drug Application (NDA) or Biologic License Application (BLA) and six times longer than it takes to approve a priority NDA/BLA.

Modernize Medicaid Pharmacy. Over the next decade, the federal government could save more than $43 billion—without cutting benefits or access—by modernizing Medicaid pharmacy benefits. Proven savings tools —including negotiating competitive pharmacy dispensing fees, encouraging even greater use of generics and preferred brands, reducing waste, and implementing pharmacy networks — have long been used by many private-sector employers, union plans, Part D, and Medicaid managed care plans, but are still underutilized by most state Medicaid programs.